District of Columbia--Purchase of Commercial Insurance Against Catastrophic Risks

The District of Columbia Corporation Counsel requested an advance decision concerning whether the District of Columbia may use its appropriated funds to purchase insurance to cover some of its catastrophic exposures to risk which may exceed its available financial resources. GAO found that the United States government's policy of insuring its own risks of loss, based on the magnitude of the government's resources and the wide dispersion of risk, does not apply to the District of Columbia proposal to purchase commercial insurance to cover catastrophic or unforeseeable risk since the U.S. government's resources would not be available to cover any loss sustained by the District. Accordingly, GAO found that the District, consistent with any applicable laws and policies of the District of Columbia, may use non-earmarked appropriated funds generated by District revenues to purchase insurance.